Embodied energy, Professor McLuhan?

by Daniel on February 12, 2007

Alex at “The Yorkshire Ranter” has a go at the concept of “embodied energy“, which is currently quite fashionable in the “Environment” section of my newspaper. I have to say I agree with him.

Anyone who has ever got close even to the very fringes of Sraffian economics or the labour theory of value is bound to be suspicious of attempts to assign a “fundamental, objective” number to a physical object based on adding up dated inputs over the history of the process that produced it. Casting an eye over the research on embodied energy confirms me in this view to some extent; I get exactly the same bilious feeling as layer after layer of complexity gets added to the same basically insoluble problem.

The trouble is that in order to calculate embodied energy, you have to invent a method of adding qualitatively quite different things, one to another. Aggregation is difficult, and people always underestimate this difficulty. Embodied energy doesn’t necessarily have the same problem as the aggregation of capital assets, because there is at least a natural unit of energy in the joule. Nor does it necessarily have an equivalent of the Transformation Problem, since the various embodied energy metrics don’t have to have any stable relationship with market prices. However, there are lots of other things that can go wrong with aggregation.

Most obviously, you have the general problem that marginals don’t add up to the total. If, for example, we want to calculate the embodied energy of a rubber duck, then what do we do about the energy embedded in the factory that produces them? If we treat it as a sunk cost, then the total embedded energy of the ducks produced will add up to less than the energy consumed in rubber duck production, which looks wrong. If we add it proportionately to every rubber duck produced, however, then producing another 200 rubber ducks will produce an amount of embodied energy which is different from the amount of energy required to produce the ducks.

This sort of problem arises in all sorts of guises in economics and business; the field of cost accounting is full of it. The thing is, it’s more or less impossible to know how to construct a single aggregate number of this kind unless you know exactly what sort of decision it is meant to be used for, such numbers are often quite dangerously misleading if used for purposes other than that for which they were designed, and even in the best case you often end up making all sorts of compromises. In its most general form, it’s known as the problem the nonexistence of generic index numbers, and if I have timed this post right, it ought to catch the attention of one of the experts on the theory of index numbers, just as the hooter goes for coffee time in Brisbane.

{ 2 trackbacks }

Diary of a Mad Natural Historian » Various and sundry links
02.15.07 at 2:56 pm
Crooked Timber » » Always Historicize
02.15.07 at 11:43 pm



Alex R 02.12.07 at 9:45 pm

As you suggest in your last paragraph, it is pretty much exactly as difficult to calculate the energy input into a product as it is to calculate the cost of a product. But trying to calculate the cost of a product is not useless, nor is calculating the energy input into a product useless.

Indeed, one could usefully define the number of joules “embodied” in a product as number of cents by which the cost of that product would increase, if the cost of every joule of energy consumed anywhere at any time were increased by one cent per joule. You’d be back with the morass of trying to calculate the cost of the product, but at least that’s an old and familiar morass.


John Quiggin 02.12.07 at 10:46 pm

Spot-on timing, DD. I just finished my second short black (espresso) of the morning, and am ready to go.

Alex the Ranter is right to say that it’s far better to tax energy at the point of consumption. The reason we might want to look at embodied energy (more precisely at embodied CO2 emissions) is to tax imports from countries that subsidise their exporters by allowing them to emit CO2 free of charge.

The technical problem here is not so much an index number problem (since we are only concerned with a single input) as a cost accounting problem that arises whenever average costs are not constant.

The embodied energy idea had an earlier vogue in the 1970s. This really was based on an energy theory of value, and went nowhere.


radek 02.12.07 at 10:53 pm

I’m still holding out for the Corn Theory of Value.


JWP 02.12.07 at 10:56 pm

I’m still holding out for the Corn Theory of ValueThe physiocrats have you covered.


Doug 02.12.07 at 11:34 pm

JQ, if you’re still here, your post on hair shirts reminded me of Bruce Sterling and his viridian-green design thinking. There’s several premises, but one of the key ones is that any outlook in which my dead grandfather is a better green than I am is not an outlook that is likely to draw much support. Have a look at viridiandesign.org, I think you’d like it.


tom s. 02.13.07 at 12:23 am

Smart man, that Alex.


dsquared 02.13.07 at 12:29 am

John: is the cost accounting problem not a special case of the index number problem? Have I been completely misled?


will u. 02.13.07 at 4:53 am

I’m not an economist, but I was just looking over the Wikipedia transformation problem article the other day, having been reading the naively plausible account of commodity exchange in the first chapters of Capital. I think stat mech is aces, and was intrigued by the blurb on Emmanuel Farjoun and Moshe Machover. Anyone know if their book is worth reading? Note the suggestive page in Capital where Marx mentions “blinding operating averages between constant irregularities,” etc.


John Quiggin 02.13.07 at 7:50 am

The classic index number problem is that of aggregating different commodities. In the context of energy, it arises in that different fuels are of different value even if their energy content (measured in joules) is the same.

But the point you were getting at, I thought, is that whenever marginal and average cost differ, there is a problem in imputing costs to marginal units of output. This is true even for a single homogenous commodity.


albert 02.13.07 at 8:19 am

Daniel, Alex, John, Anyone…

While there are plenty of problems in attempting to derive and account for “fundamental, objective” values in a product or production process, I’m curious to know what is thought about the actual existence of fundamental, objective values regardless of our ability to know/measure them. For example, the LabourToV seems mistaken in a number of ways. Perhaps the EnergyToV is too, I don’t know.

Additionally, do attempts to work with fundamental, objective values fail because the values they try represent are flawed, because they’re just too unwieldly, or because of social or academic power dynamics?



Scott Martens 02.13.07 at 8:48 am

One might read the labour theory of value not as a rigorous economic doctrine but as a political one – placing human labor at the centre of economic activity not because it has unique formal properties that make it different from a corn theory of value, but because no one gives a crap about how corn feels when it’s exploited or whether corn can afford medical insurance for its kids. One could offer up a similar interpretation of “embodied energy” – seeing it as a kind of techno-centric political doctrine that measures social activity on the basis of the energy production and availability of an industrial society.

But that lacks the kind of liberatory potential that made a labor theory of value so popular. Even as an environmental doctrine, it’s not as if the production of energy is even necessarily central to protecting the environment. Other kinds of production can be far more polluting.

No – I imagine it’s not a very good policy idea.


Daniel 02.13.07 at 11:26 am

ahhhh I see. Although the most vicious battles fought in any really homicidal fully-allocated-costs war are almost always over allocations of depreciation and charges for capital employed, so there is a bit of aggregation in there too.


gmoke 02.14.07 at 12:41 am

Energy – exergy – essergy – emergy

These are terms from thermodynamics applied to energy economics. Nicholas Georgescu-Roegen is probably one very good place to start if you want to understand them from the ground up.

I had the privilege of hearing him lecture once. Not that I remember any of it now.

Comments on this entry are closed.